Declining enrollment is causing Tulsa Public Schools to dig deeper into its fund balance despite a boost in state aid, a trend officials say is unsustainable.
The Tulsa school board on Monday approved a preliminary budget for the 2019-20 school year anticipating total revenue of almost $625 million and total expenditures of about $608 million. The budget shows the district’s general fund — the revenue source that pays the majority of the district’s costs — with total revenue of about $355 million and total expenditures of about $339 million.
The budget shows an increase of close to $9 million in expenditures for the general fund in the coming fiscal year. The increase primarily is due to additional state aid acquired during the recent legislative session that is earmarked for teacher raises, TPS Chief Financial Officer Nolberto Delgadillo said.
TPS is projected to receive about $7 million due to the state budget’s inclusion of $74 million for the funding formula to allow schools to hire additional staff, lower class sizes and pay for materials. Of the $7 million, the district plans to invest $3.5 million in certified salary increases on top of the already budgeted approximately $1.5 million as well as about $2.5 million in additional school allocations.
However, that funding increase is not enough to offset extensive budget cuts from the past decade, Delgadillo said. From an operational perspective, the district is about $14 million short of its budget a decade ago.
“At the end of the day when we think about the way the funding formula works in the state, we would need about another $300 million of nonrestrictive operational dollars into the state’s funding formula to help offset that shortfall,” Delgadillo said. “And that’s just to offset the shortfall. It wouldn’t take us above and beyond.”
About $28.5 million of the combined $32 million in new funding acquired by TPS for the 2018-19 and 2019-20 school years is used for salary increases, leaving only $3.5 million for other needs such as supplies and materials.
The budget woes have been exacerbated by a steady enrollment decline in Tulsa Public Schools. A district’s enrollment helps determine its share of the state aid funding formula.
Delgadillo said the projected revenue loss in 2018-19 and 2019-20 is about $15 million because of the decrease in student enrollment throughout the district.
The financial loss has prompted officials to rely on the district’s reserve funds — known as its fund balance — for the first time in nine years. The district is expected to use about $4 million of the fund balance for 2018-19 and is budgeting to use about $12 million more for 2019-20.
This latest move would shrink the general fund balance from a projected $28 million at the beginning of the 2019-20 school year to $16 million by its end.
“If we continue this spending pattern, we’re not going to be able to rely on a fund balance for 2020-21,” Delgadillo said.
He projects a deficit of about $17 million to $20 million for the 2020-21 school year and an additional deficit of $5 million to $10 million in 2021-22 if there is no change in funding or any spending reductions.
Delgadillo said Oklahoma would need to invest at least $400 million into state funding for 2020-21 to mitigate the impact of that decline.
In other action, the school board approved the renewal of Greenwood Leadership Academy’s annual contract and authorized the partnership school to serve a maximum of 320 students from prekindergarten through third grade.
The school, if its contract is renewed each year, projects to grow to 560 students from prekindergarten through fifth grade.
An old landfill site breached by floodwaters along Bird Creek at Oxley Nature Center got a closer look by federal, state and city officials. They need to come up with a plan — one that might address more than just one breach site. One thing was clear, however. It won’t be a simple matter.